The advanced packaging market was valued at USD 23.93 billion in 2020, and it is expected to reach a value of USD 38.16 billion by 2026, registering a CAGR of 7.84% over the forecast period. Since the inception of the first semiconductor package in 1965, advanced packaging technologies have been evolving considerably, with several thousands of different semiconductor package types having been produced.
- Advanced packaging technology has evolved to minimize the cost involved and enhance the overall throughput and performance of ICs. Further, With the augmented adoption of semiconductor ICs in automobiles, the demand for advanced packaging has increased considerably in recent years.
- The innovation in the packaging technology is also related to an increase in the functional density of large system-on-chip solutions. As a result, the focus on heterogeneous integrations and wafer-level packages have prompted the chip industry to develop a new set of solutions, collectively known as advanced packaging.
- Another significant trend affecting the advanced packaging market is the increase in the size of silicon from 100 mm to 300 mm. The shift to longer diameter wafers has reduced the cost of manufacturing by 20-25%, which is expected to drive this capital into advanced packaging solutions.
- Growing miniaturization of devices, increasing MEMS adoption is also helping the embedded die packaging market gain renewed demand. Though the technology is not new in the market, it has been diversified to niche applications due to high cost and low yield but has immense potential for development in the future. Advancements in Bluetooth and RF modules and the rise of WiFi-6 could further fuel investments in the technology.
- However, according to the Semiconductor Industry Association, strict controls and conditions position semiconductor production facilities to be more resistant to the impact of COVID-19 as a typical cleanroom have a maximum of only ten particles per cubic meter in a size range of 0.1 micrometers and the average size of the COVID-19 microbe is 0.125 micrometers. Moreover, most semiconductor operations in various countries, such as South Korea, continued uninterrupted, and chip exports grew by 9.4% in February 2020.
Key Market Trends
Fan-out Wafer Level Packaging Expected to Witness Significant Growth Rate
The redistribution technology was primarily developed out of necessity to enable fan-in area array packaging (bumping) to take hold when a few chips were being designed for the area array. In the intervening years, this technology has been instrumental in developing multiple newer packaging technologies such as wafer-level packaging (WLP), fan-out packaging, and TSV-based interposers and chip stacks.
- Fan-out wafer-level packaging (FOWLP) has emerged as a promising technology to meet the ever-increasing demands of consumer electronic products. The significant advantages of this type of packaging are specific features such as substrate-less package, lower thermal resistance, and higher performance due to shorter interconnects combined with direct IC connection by thin-film metallization instead of the standard wire bonds or flip-chip bumps and more moderate parasitic effects.
- Fan-out wafer-level packaging (FOWLP) is the latest packaging trend in the field of microelectronics. With various technological developments towards heterogeneous integration, including multiple die packaging, passive component integration in packages and redistribution layers, and other package-on-package approaches, larger substrate formats are targeted with the help of FOWLP. Hence, it is well suited for packaging a highly miniaturized energy harvester system consisting of a piezo-based harvester, a power management unit, and a supercapacitor for energy storage.
- The vendors in the market are also innovating their processes to expand their technology. For instance, in November 2020, Samsung presented a paper titled “Advanced RDL Interposer Packaging Technology for Heterogeneous Integration.” The company stated that it had developed an RDL Interposer package as a 2.5D package platform that was based on RDL-first fan-out wafer level package (FOWLP).
- There has been a never-ending drive for improved performance in electronic devices for multiple applications such as mobile, consumer, automotive, or industrial applications. Fan-Out Wafer-Level Packaging (FOWLP) was primarily developed to enable higher performance and functionality, with increased reliability and higher levels of integration in a small form factor; all of this was done while targeting significant cost reductions as compared to the exiting packing technologies.
- All advanced IC packages, including the fan-out wafer-level packages (FOWLP), can only be made profitably and reliably by making use of special electronic solutions, such as conductors and insulators, to form the best electrical connections.
Asia Pacific is Expected to Witness Significant Growth Rate
By region, the Asia Pacific region is accounted for the largest market share of 64.01% in 2020 and is also expected to witness the highest CAGR, amounting to 8.21%, over the forecast period. The Asia Pacific holds a prominent share of the market due to a significant number of semiconductor manufacturing operations happening in the region. The pure-play manufacturers operating in the region are increasing their production capacity to cater to the growing demand from fabless vendors. China is also trying to consolidate its substrate manufacturing market.
- Manufacturers in the Asia-Pacific region focus on increasing their customer base in North America due to increasing demand from data centers and AI. For example, Ibiden is working toward boosting its sales from Semicon players, such as Intel, while scaling down the Flip Chip business that serves domestic smartphone markets and plans to increase the capacity in its Japanese plant by 50% by the end of 2020 by focusing on silicon bridges which connect memory semiconductors with CPUs and GPUs.Further, China is one of the largest growing economies present with a large population, and according to statistics from China’s semiconductor association, the import of IC was witnessing an increase in the demand for the consecutive years from 2014. The Chinese government has deployed a multi-pronged strategy, which led to the support of domestic IC industry development to become the global leader in all primary IC industrial supply chain segments by 2030. This growth in the semiconductor IC industry in the region is anticipated to stimulate the demand for advanced packaging.
- Japan holds a significant position in the semiconductor industry as it is home to some of the major IC chipset manufacturers and electronics industry. Moreover, in May 2020, a new report suggested that the country is planning on attracting semiconductor manufacturers, such as Taiwan Semiconductor Manufacturing Company (TSMC) and Intel. The government is expected to start an investigation to look into future prospects to bring the major chipmakers to the country.
- Players in the region involve themselves with organic growth initiatives, which are leveraging market growth. For instance, in November 2020, Taiwan Semiconductor Manufacturing Co. announced that it was working with Google and other US tech giants to develop a new way of making semiconductors more powerful. According to the company, TSMC is taking chip packaging vertically and horizontally using a new 3D technology that it dubs SoIC. It makes it possible to stack and link several different types of chips, such as processors, memory, and sensors, into one package.
- With the rapid growth in the advanced packaging market, domestic packaging material suppliers are expanding with the industry and starting to serve leading international packaging houses. The consumption of semiconductors is rapidly increasing in China, compared to other countries, owing to the continuing transfer of global, diverse electronic equipment to China, where the product is necessary. Also, the country is home to three of the top five largest smartphone companies globally, posing tremendous opportunities for semiconductor adoption and advanced packaging.
The Advanced Packaging Market is witnessing dominance by ten to fifteen significant players like Intel Corporation, Samsung Electronics Co. Ltd. The market is significantly driven by end-user revenue because of the demand for the latest technology and high-speed gadgets. The companies have a sustainable competitive advantage through innovations in this market, owing to the growing need for differentiated products for various applications. The constant evolution of technological developments in smartphones, tablets, wireless communications, etc., will positively impact this industry.
- May 2020 - Synapse Electronique, a Canadian equipment electronics manufacturer and EMS provider, integrated two Universal Instruments Fuzion Platform production lines in its Shawinigan, Quebec facility. Each line includes a Fuzion2-60 and FuzionXC2-37 Platform, providing the performance to meet Synapse’s long-term OEM throughput requirements and the flexibility to support stringent contract-manufacturing demands.
- Aug 2020 - Samsung Electronics announced the availability of its silicon-proven 3D IC packaging technology, eXtended-Cube (X-Cube), for most advanced process nodes. X-Cube enables significant leaps in speed and power efficiency to help address the rigorous performance demands of advanced applications, including 5G, artificial intelligence, high-performance computing, mobiles, and wearables.
- Feb 2021 - Siemens Digital Industries Software announced that its collaboration with Advanced Semiconductor Engineering, Inc. (ASE) generated two new enablement solutions engineered to help mutual customers create and evaluate multiple complex integrated circuit (IC) package assemblies and interconnect scenarios in a data-robust graphical environment prior to and during physical design implementation.
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Table of Contents
1.2 Scope of the Study
4.2 Industry Value Chain Analysis
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
4.4 Market Drivers
4.4.1 Increasing Trend of Advanced Architecture in Electronic Products
4.4.2 Favorable Government Policies and Regulations in Developing Countries
4.5 Market Restraints
4.5.1 Market Consolidation affecting Overall Profitability
4.6 Impact Of Covid-19 on the Industry
5.1.1 Flip Chip
5.1.2 Embedded Die
5.2.1 North America
5.2.3 Asia Pacific
5.2.4 Rest of the World
6.1.1 Amkor Technology, Inc.
6.1.2 Taiwan Semiconductor Manufacturing Company, Limited
6.1.3 Advanced Semiconductor Engineering Inc.
6.1.4 Intel Corporation
6.1.5 STATS ChipPAC Pte. Ltd
6.1.6 Chipbond Technology Corporation
6.1.7 Samsung Electronics Co. Ltd
6.1.8 Universal Instruments Corporation
6.1.9 SÜSS Microtec Se
6.1.10 Brewer Science, Inc.
A selection of companies mentioned in this report includes:
- Amkor Technology, Inc.
- Taiwan Semiconductor Manufacturing Company, Limited
- Advanced Semiconductor Engineering Inc.
- Intel Corporation
- STATS ChipPAC Pte. Ltd
- Chipbond Technology Corporation
- Samsung Electronics Co. Ltd
- Universal Instruments Corporation
- SÜSS Microtec Se
- Brewer Science, Inc.